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DOHA: Qatar’s central bank has warned financial institutions in the country not to trade in bitcoin or other cryptocurrencies, according to financial sources and a circular seen by Reuters.

Bitcoin and other virtual currencies have come under increasing global regulatory scrutiny amid wild swings in prices for the emerging asset class. Having peaked at almost $20,000 in December, Bitcoin was trading at about $8,550 on Thursday.

The letter sent to financial institutions by the Qatar central bank said it “politely requested banks and exchange houses in the country not to deal in any way with this currency, or exchange it with another currency, or open accounts to deal with it, or send or receive any money transfers for the purpose of buying or selling this currency”.

The central bank added that failure to comply with its request could result in penalties under existing legislation.

Commercial bankers in Qatar told Reuters that banks in the tiny but super-rich country, the world’s top exporter of liquefied natural gas, were already avoiding involvement with bitcoin. However, Internet postings suggest that some Qatar residents have been buying bitcoin through online exchanges or exploring the possibility of investing in the virtual currency.